Washington, D.C.—Today, on behalf of American job creators and workers, the Coalition to Preserve American Jobs (CPAJ) has come together to highlight the positive impact the Employee Retention Tax Credit (ERC) has had on keeping businesses open and preventing layoffs over the last four years. CPAJ will urge the Internal Revenue Service (IRS) to restart the processing of ERC claims immediately.
In September 2023, the IRS announced a moratorium on processing ERC claims until at least December 31, 2023, leaving over 600,000 businesses with pending claims in limbo. Since September, the backlog has ballooned to over one million claims.
The IRS instituted a moratorium due to instances of widespread fraud throughout the program; however, out of 3.6 million claims, only 252 cases of fraud were identified at the time of the September announcement, which is less than .1% of total claims. The moratorium also has had a chilling effect on the significant number of small businesses just now starting to explore the ERC, those who may be unsure of their eligibility, or lack the necessary internal/accounting resources to evaluate the application process. The missed opportunity to apply for this essential tax credit will force some businesses to close their doors, resulting in layoffs and adding to the economic uncertainty workers are already facing in a high inflationary environment.
CPAJ is calling for an immediate end to the ERC moratorium. CPAJ is comprised of a half dozen founding members touching nearly every aspect of the American economy: the National Automatic Merchandising Association (NAMA), the International Franchise Association (IFA), the Theatre Communications Group, the Elite Caterers and Event Professionals, the Payroll Group, and the Health and Fitness Association (IHRSA).
“When confronted with the grim prospect of laying off employees or boarding up shop due to COVID-19 restrictions, I’ve personally observed the resilience and sacrifices made by small, local employers across America. Despite facing unprecedented and long-lasting challenges, they kept their doors open, continued issuing paychecks, and paid their taxes,” said Michael Grosberg, Board Member of CPAJ, a seasoned industry executive with 30 years of experience and CEO of Boston Growth Partners, a management consulting firm. “CPAJ will highlight the success of the ERC, a cost-effective and worthwhile pandemic program that directly supported jobs in local communities. Although Congress and the President pledged a refund of self-funded payroll taxes during their struggles, many are still anxiously awaiting updates.”
“So many of our members benefited from the establishment and extension of the ERC, which we advocated for strongly. NAMA is proud to be part of CPAJ and continue fighting for our members, some of whom are still in need of the tax relief provided by this credit,” said Robert
Jackson, CPAJ Board Member and Director of Government Affairs at NAMA.
“Franchise owners throughout the country utilized the ERTC to maintain their operations and keep paychecks flowing to millions of American workers over the last few years. IFA looks forward to working through CPAJ to ensure eligible franchise owners can pursue valuable ERTC benefits,” said Mike Layman, IFA, SVP of Government Relations and Public Affairs.
“The theater industry faced an existential crisis when the COVID-19 pandemic broke out. The economic recovery for our industry continues, which is why we are joining CPAJ with the goal of advocating for this critical tax credit that our industry continues to benefit from,” said Laurie Baskin, Director of Advocacy at the Theatre Communications Group.
“Through our work with thousands of businesses preparing payrolls and reducing overheads, we know the difference ERC has made for so many companies. We are committed to working alongside our fellow CPAJ members and build momentum for the ERC program to resume,” said Chris McCannell, Senior Government Affairs Advisor at The Payroll Group, representing independent payroll services companies.
“For almost two whole years, our industry was at a standstill. Now, we are still in the process of working our way back. The ERC has been invaluable for countless event and catering professionals as well as the businesses their jobs depend on. We are all in with our CPAJ partners to keep ERC,” said Scott Halloran, Chair of the Elite Catering + Event Professionals. “Fitness facilities were some of the hardest hit businesses due to the pandemic–in many cases being the first industry to close and the last to open. The ERC was one of the only lifelines available for operators and remains pivotal as we round the corner on recovery, and continue providing diverse access to physical activity for consumers,” said Mike Goscinski, Vice President
of Government Affairs at IHRSA.
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